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MND NewsWire features plain and simple interpretations of industry related data and events written in a manner that maintains the interest of random readers while still catering to the perspective of a housing market professional.

An Atlanta-based Internet mortgage
company, its owner and an affiliate have been hit with a $19.3 million penalty
for what the Consumer Financial Protection Bureau (CFPB) said was a bait and
switch mortgage scheme. Amerisave
Mortgage Corporation, its affiliate Novo Appraisal Management Company, and
Patrick Markert the owner of both companies were found by the Bureau to have
lured customers by advertising misleading interest rates and then locked them
in with costly up-front fees, failed to honor the advertised rates, and
illegally overcharged them for third-party services without disclosing the
affiliated relationship.

Under terms of a consent order announced
on Tuesday Amerisave and Novo will refund $14.8 million to consumers harmed by
the scheme and will pay a $4.5 million penalty into the Bureau's Civil Penalty
Fund. Markert as an individual, will pay an
additional $1.5 million fine.

Amerisave advertises and lends
nationwide. CFPB contends that between
mid-2011 and 2014 the company used online banner ads and searchable rate tables
on third-party websites, posted inaccurate rates on these ads, and when
consumers followed the ads to the Amerisave website were given rate quotes
based on a FICO score of 800 regardless of the score the consumer provided in a
questionnaire. Consumers were required
to order and authorize payment for an appraisal before Amerisave would provide
a Good Faith Estimate and the company did not tell consumers until later that
appraisal orders were being referred to Novo, its affiliated company.

At closing customers were charged for "appraisal
validation" reports also provided (and undisclosed to the consumer) by Novo
which marked up the cost of the reports by as much as 900 percent after
Amerisave had informed customers they had arranged for a "special deal" for the
reports.

In addition to the financial penalties
the consent agreement requires that Amerisave stop advertising the unavailable
mortgages rates, no longer charge illegal fees or make referral to its affiliates
without proper disclosures, implement a quality control program, and retain an
independent consultant to review its advertising practices.

"Amerisave lured consumers in with
deceptive advertising, trapped them with costly upfront fees, and then
illegally overcharged them for services from an undisclosed affiliate," said
CFPB Director Richard Cordray. "By the time consumers could have discovered the
advertised low rates were too good to be true, they had already committed to
pay hundreds of dollars to Amerisave. Today's action puts an end to Amerisave's
unacceptable bait-and-switch scheme and holds Patrick Markert personally
responsible for his illegal actions."

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